Chapters :

Industry & Infrastructure – 08

MSME sector in India

Micro small and medium enterprise is emerging as the growth engine of Indian Industry and economy with a contribution of 37.5% of country’s GDP and employment of40% and 45% of export. Hence its role and development is core of Indian economy’s development.

MSMEs not only play crucial role in providing large employment opportunities at comparatively lower capital cost than large industries but also help in industrialization of rural & backward areas, thereby, reducing regional imbalances, assuring more equitable distribution of national income and wealth. MSMEs are complementary to large industries as ancillary units and this sector contributes enormously to the socio-economic development of the country.

The Micro; Small and Medium Enterprises Development (MSMED) Act was notified in 2006 to address policy issues affecting MSMEs as well as the coverage and investment ceiling of the sector. The Act seeks to facilitate the development of these enterprises as also enhance their competitiveness. It provides the first-ever legal framework for recognition of the concept of “enterprise” which comprises both manufacturing and service entities. It defines medium enterprises for the first time and seeks to integrate the three tiers of these enterprises, namely, micro, small and medium.

Definition – the definition of micro manufacturing and services unit was increased to Rs. 1 crore of investment and Rs. 5 crore of turnover. The limit of small unit was increased to Rs. 10 crore of investment and Rs 50 crore of turnover. Similarly, the limit of a medium unit was increased to Rs 20 crore of investment and Rs. 100 crore of turnovers.  It is the latest revision in accordance with Atmanirbhar Bharat

Policies of MSME sector

  1. Prime Minister Employment Generation Programme (PMEGP)
  2. Credit Guarantee Trust Fund for Micro & Small Enterprises (CGTMSE)
  3. Credit Linked Capital Subsidy for Technology Upgradation (CLCSS)
  4. Revamped Scheme of Fund for Regeneration of Traditional Industries (SFURTI)

The main objectives of the SFURTI scheme is to organise traditional industries, provide sustained employment, enhance marketability, equip traditional artisans and further boost the governance cluster systems.

  1. Financial Support to MSMEs in ZED Certification Scheme
  2. A Scheme for Promoting Innovation, Rural Industry & Entrepreneurship (ASPIRE)

This MSME scheme aims to create new jobs and reduce unemployment, promote entrepreneurship culture in India, boost economic development, facilitate innovative business solution for un-met social needs, and promote innovation to further strengthen the competitiveness of the MSME sector.

  1. National Manufacturing Competitiveness Programme (NMCP)
  2. Entrepreneurship Skill Development Programme (ESDP)
  3. This aims to organise Entrepreneurship Development Programmes on a regular basis to nurture the talent of youth by bulding their capacity on various aspects of industrial activity required for setting up MSEs.
  4. Assistance to Training Institutions (ATI)
  5. This MSME scheme aims to provide capital grant to the training institutions at country level which are operating under the Ministry of MSME for the purpose of creation and strengthening of infrastructure and support for entrepreneurship and skill development training/ capacity building programmes.
  6. Micro & Small Enterprises Cluster Development (MSE-CDP)

This MSME scheme provides financial assistance for establishment of Common Facility Centres (CFCs) for testing, training centres and other R&D and to create/ upgrade infrastructural facilities (IDs) in the new/ existing industrial areas/ clusters of MSE’s.

  1. To manage all this, a robust ICT based system called CHAMPIONS has also been launched by the Ministry of MSME. The portal is not only helping and handholding MSMEs in the present situation, but is also providing guidance to grab the new business opportunities and in the long run, become national and international Champions.
  1. IT portals – MSME Samadhaan; MSME Sampark; MSME Sambhand; UAM (Udham Aadhar Memorandum)

Electronic manufacturing industry

  • The vision of National Policy on Electronics 2019 (NPE 2019) notified on 25.02.2019 is to position India as a global hub for Electronics System Design and Manufacturing (ESDM) by encouraging and driving capabilities in the country for developing core components, including, chipsets, and creating an enabling environment for the industry to compete globally.
  • A vibrant electronic components manufacturing ecosystem is vital for the overall long-term and sustainable growth of electronics manufacturing in India and essential to achieve net positive Balance of Payments (BoP
  • National Policy on Electronics, 2019, Modified Special Incentive Scheme (MSIPS), Electronics Manufacturing Clusters and Electronics Development Fund etc., India’s production of electronics grew from USD 29 billion in 2014 to USD 70 billion in 2019.
  • India now has become the 2ndlargest mobile phone producer in the world.
  • With a view to building a robust manufacturing ecosystem which will be an asset to the global economy we are looking forward to developing a strong ecosystem across the value chain and integrating it with global value chains. This is the essence of these three Schemes namely, the (i) Production Linked Incentive Scheme (PLI)for Large Scale Electronics Manufacturing,

(ii) Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) and

(iii) Modified Electronics Manufacturing Clusters (EMC 2.0) Scheme.

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